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BY MICHAEL HEMSEY OMNICHANNEL LOYALTY DESIGNING THE ULTIMATE CUSTOMER EXPERIENCE WHITEPAPER | MAY 2012

OMNICHANNEL LOYALTY - · PDF fileOmnichannel loyalty seeks to move customer engagement much higher ... VP of Brand Loyalty Kobie Marketing Successful omnichannel loyalty is about delivering

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Page 1: OMNICHANNEL LOYALTY - · PDF fileOmnichannel loyalty seeks to move customer engagement much higher ... VP of Brand Loyalty Kobie Marketing Successful omnichannel loyalty is about delivering

BY MICHAEL HEMSEY

OMNICHANNEL LOYALTY

DESIGNING THE ULTIMATECUSTOMER EXPERIENCE

WHITEPAPER | MAY 2012

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PUBLISHED BY

KOBIE MARKETING, INC.100 Second Avenue South, Suite 1000St. Petersburg, Fl 33701

P: +1 (727) 822-5353F: +1 (727) 822-5265

@Kobie_Marketing

Copyright © 2012 Kobie Marketing, Inc.All rights reserved.

No part of the contents of this publication may be reproduced or transmitted in any form or by any means without written permission of Kobie Marketing, Inc.

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Omnichannel Loyalty: Designing the Ultimate Customer Experience3

It’s as if it were some kind of secret enchantment: the ability for marketers to

connect with their customers in such a seamless and relevant manner that they

don’t feel they’ve experienced being “sold” at all. Think about it. Success means

the endgame of loyalty is in the palm of your hand—a customer returning to

your brand for purchase after purchase, time and time again.

Peter Drucker, the renowned management consultant, knew when he spoke of

this “charm of invisibility” (a nod to the magic of Harry Potter) that seamlessness

would depend on a marketer’s ability to tuck and fold the message neatly into the

delivering mechanism, touching the mind of the consumer. This is the inspiration

for a new way of delivering customer experience; a term alone that promises a

kind of mystic presence.

WHAT IS OMNICHANNEL LOYALTY?

Q: Can you be in multiple places at one time? A: Yes, you can be everywhere—omnipresent.

In fact, the 21st century shopper expects it.

The lines between the various marketing channels are blurring like never before.

The term omnichannel is an outgrowth of multi-channel marketing—efforts that

under the proper management expertise and technology solutions can be

upgraded to offer an omnichannel experience. And in these tech-centric times,

omnichannel loyalty is the answer. In simple terms, it’s the promise of

omnichannel marketing brought to life. Marketers want to sell products to

consumers while loyalty experts wish to engage, retain and grow these new

customers and drive them to advocacy. But truly, the only way to accomplish both

effectively is by offering channel-optimized loyalty programs “right timed” to deliver

engagement at each and every touch point that meet the needs of each customer

on their own level.

“ The aim of marketing is to know and understand the customer so well that the product or service fits and sells itself. Peter F. Drucker (1909-2005)

Between print, online, broadcast, mobile, retail point-of-sale, gaming, kiosk,

outdoor, direct mail and social media (to name a few), omnichannel marketing

surrounds us. Think of it as the marketing 6.0 upgrade to what’s been occurring

for years. But in order for omnichannel marketing to truly achieve the vision set

forth by Drucker, it’s paramount to understand the essence of omnichannel

loyalty, too.

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ACQUIRE GROW ENGAGE RETAIN> > >

TRADITIONAL LOYALTY PROGRAMS

>

< <% FALL OFF

BRANDAMBASSADOR

OMNICHANNEL LOYALTY< <

Omnichannel marketing is the fundamental practice of providing a

seamless marketing experience across all mediums possible, engaging

consumers with the right message at the right time on the right channel.

Unlike traditional rewards programs, omnichannel loyalty is the approach

to maximizing cross-channel marketing with an emphasis on driving

cumulative loyalty-related outcomes—not through a single campaign,

but through a lifetime of ongoing campaigns that speak to that customer

and engage them within the brand. But key to its success is that it’s

accomplished in a way that isn’t bombastic, monolithic or intrusive,

but rather organic, intuitive, individualized, engaging and fun—and

offered in real time, 24-7-365, regardless of the channel.

WHY IS IT IMPORTANT?

POS

MOBILE

WEBSITE

iPAD

TWITTER

@

PRINT ADVERTISING

E-NEWSLETTER

EMAIL

DIRECT MAIL

FACEBOOK

OMNICHANNELLOYALTY

A customer-centric

approach to maximizing

cross channel marketing

that builds brand

allegiance at first

impression, driving

cumulative effect on

loyalty-related outcomes

over time.

Omnichannel Loyalty: Designing the Ultimate Customer Experience4

Too often marketers—even successful multi-channel ones—fail to

incorporate loyalty early enough into the omnichannel “big picture.” Instead

they focus their loyalty efforts toward the middle or end of a campaign. Think

of the brick and mortar experience where, after browsing store aisles and

selecting products for purchase, only then does a salesperson or cashier try

to entice the customer into a loyalty program. And often it’s neither, it’s a

sign at the cash/wrap counter: “Get our card today and get double points on

your purchases,” or the like.

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Underscoring the need for loyalty improvement, the latest Forrester

research from the company’s 2012 Global Loyalty Online Survey found

that only 37% of respondents defined customer engagement as one of

the top-three business objectives for their loyalty campaigns. And when

it came to the types of loyalty programs offered, only 42% of companies

created an experience-based campaign versus a strictly discount-based

one. This information comes at a time when all verticals seem to be

elevating the customer experience to the highest objective in their

yearly strategy plan.

Omnichannel loyalty seeks to move customer engagement much higher

on the marketer’s priority list, and this notion will undoubtedly grow as a

direct response to consumer needs, wants, desires and purchasing habits.

Whereas multi-channel marketing is often haphazard or erratic so as to

cause growing numbers of consumers to tune out and reject marketing

ploys altogether, the emerging omnichannel loyalty approach is a

safeguard against such disengagement. It is about right-timing and right

placing; it’s about opting in and expecting pushed materials across the

channels they choose. This is customization in action, enhancing the

customer experience in a more personalized and interactive manner.

Consider omnichannel loyalty experience something that, to use

Peter Drucker’s own words, sells itself.

THE OMNICHANNEL VOID

lost sa les oppor tuni ty costs

customer expects s imi lar exper ience regard less of channel used

inconsis tent branding across channels

49%

42%

35%Source: Aberdeen Group’s 2011 Omnichannel Experience Report

“Marc Glazer

VP of Brand Loyalty Kobie Marketing

Successful omnichannel loyalty is about delivering loyalty from the very beginning of the customer lifecycle, across all channels—seamlessly. True connection begins even before consideration; I'm talking about that inkling that makes someone engage in the first place, and say “yes please” or “more please,” sparking an instant got-to-have-it moment. That inception signifies success.

MISSED OPPORTUNITIES

Omnichannel Loyalty: Designing the Ultimate Customer Experience5

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MEGA-CONVENIENCE TO MEGA-CONVERGENCE

2

3

2

INCREASE new business/secure new customers

DRIVE incremental sales from existing customers

REDUCE attrition

MAXIMIZE marketing effectiveness

LEVERAGE data

BUILD loyalty

The move toward mega-convergence (and mega-convenience) is nothing

new. It’s the idea that inspires physicists in search of the “theory of

everything” that can predict all possible physical outcomes to an event.

It’s the marketing genius that helped one-stop-shopping outlets like early

20th Century general stores evolve into the 21st Century Wal-Marts and

Targets of the world—general stores on overdrive. And it’s how

once-popular personal digital assistants like the Newton and Palm Pilot

(remember those?) have morphed into modern iPhones and Androids,

capable of performing and seamlessly integrating all the tasks of multiple

PEDs (data storage, Internet/email, mobile phone, music, video, media

and games) in one device.

And just like the above examples, it is customers who are helping drive

this change to omnichannel convergence. One way they are doing that is

through mass smartphone adoption—one of marketing and loyalty’s most

valuable customer service resources, capable of tracking vital metrics

including opt-in, coupon redemption and location awareness tracking.

With adoption rates now exceeding 60% in many countries, a critical

mass has been reached. And with upward of 80% of U.S. consumers in

2011 using the web at some point in their product research and

purchasing, according to consulting firm Cook Profitability Services, the

lines between purchasing channels are clearly not limited to the

in-store/mobile example from above.

This development stands in sharp contrast to the web’s earlier days when

it was expected the Internet would be a standalone product platform.

where offerings such as loyalty programs could be specifically targeted

without respect to other channels. Instead what happened was fierce

intra-brand competition.

Marketers were ultimately taken off message, allowing competitors to

gain the better hand. Worse still, not only were brands isolated by

marketing platforms, the early web and its products, it turned out, were

not nearly as valuable as Year 2000 NASDAQ prices would have

investors believe. On March 10 of that year, dot-com prices peaked and

the bubble burst. For marketers and their loyalty programs (where they

existed), the end was in sight. Inventory and customer service had to be

jettisoned through deep cost cutting, heavy sales and promotions that did

Omnichannel Loyalty: Designing the Ultimate Customer Experience6

Even though the borders of marketing channels have grown more porous

and show signs of heightened convergence, they still adhere to age-old

basic marketing principles:

“Cook Profitability Services

“Upward of 80% of U.S. consumers in 2011 used the web at some point in their product research and purchasing.

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The move toward mega-convergence (and mega-convenience) is nothing

new. It’s the idea that inspires physicists in search of the “theory of

everything” that can predict all possible physical outcomes to an event.

It’s the marketing genius that helped one-stop-shopping outlets like early

20th Century general stores evolve into the 21st Century Wal-Marts and

Targets of the world—general stores on overdrive. And it’s how

once-popular personal digital assistants like the Newton and Palm Pilot

(remember those?) have morphed into modern iPhones and Androids,

capable of performing and seamlessly integrating all the tasks of multiple

PEDs (data storage, Internet/email, mobile phone, music, video, media

and games) in one device.

And just like the above examples, it is customers who are helping drive

this change to omnichannel convergence. One way they are doing that is

through mass smartphone adoption—one of marketing and loyalty’s most

valuable customer service resources, capable of tracking vital metrics

including opt-in, coupon redemption and location awareness tracking.

With adoption rates now exceeding 60% in many countries, a critical

mass has been reached. And with upward of 80% of U.S. consumers in

2011 using the web at some point in their product research and

purchasing, according to consulting firm Cook Profitability Services, the

lines between purchasing channels are clearly not limited to the

in-store/mobile example from above.

This development stands in sharp contrast to the web’s earlier days when

it was expected the Internet would be a standalone product platform, At

IT'S A FACT

WHY?

5

6

Another interesting case study is the newspaper industry. Once on the

edge of extinction, newspapers have arguably learned a lesson from

their own history as they continue to drive print and online loyalty

simultaneously. Look at how print edition New York Times subscribers

can access the complete digital newspaper online or on their mobile

device. Non-subscribers, however, are given limited access via a free

iTunes app to read “top news” for free. This dual tactic helps preserve

already loyal customers and attract new ones by essentially offering a

“free sample” of their work.

Ed Hadley

Senior Marketing Manager

Neolane, a B2B and B2C

digital marketing

software firm

At that time, offerings such as loyalty programs could be specifically

targeted without respect to other channels. Instead what happened was

fierce intra-brand competition.

Marketers were ultimately taken off message, allowing competitors to

gain the better hand. Worse still, not only were brands isolated by

marketing platforms, the early web and its products, it turned out, were

not nearly as valuable as Year 2000 NASDAQ prices would have

investors believe. On March 10 of that year, dot-com prices peaked and

the bubble burst. For marketers and their loyalty programs (where they

existed), the end was in sight. Inventory and customer service had to be

jettisoned through deep cost cutting, heavy sales and promotions that did

nothing for leveraging brand value. Fast forward a decade and just

offering products and promotions through multiple touch points is no

longer enough.

Omnichannel is to retail/commerce what cross-channel is to marketing; both terms revolve around making the customer experience truly seamless and highly relevant across a growing spectrum of channels and devices.

Omnichannel Loyalty: Designing the Ultimate Customer Experience7

Loyal customers are repeat customers. And while IDC data shows that

multi-channel customers spend 15% to 30% more than single-channel

customers, additional data reveals that omnichannel customers spend 15%

to 30% above multi-channel customers.

Because omnichannel customers have been engaged through multiple

platforms simultaneously and remain loyal thanks to timely, relevant and

individualized content.

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EMERGING TECHNOLOGY CHANNELSTwo years ago, Gartner predicted that by 2013 mobile devices would become the

dominant way to access the web. The charts at left speak for themselves, but

clearly the conversion to the smartphone/tablet is remarkable. Much of the

conversion is due to continued Internet proliferation, but it’s the ubiquitous nature

of the smartphone/tablet and its multifunctional ability that’s truly paving the way.

While the opportunity to build loyalty through mobile is virtually unlimited, we’re

only starting to scratch the surface. According to Adobe Digital Marketing, tablet

consumers are more valuable than smartphone consumers as they tend to

purchase and spend more than those who visit retailer websites via their

smartphone. In fact, this analysis of 16.2 billion visits to websites of more than 150

retailers not only found that tablet visitors spend over 50% more per purchase than

smartphone visitors, but over they spend 20% more than visitors who use their

desktop/laptop computers (traditional visitors). Moreover, since the user

experience is different on a tablet than a smartphone, retailer websites now need

to be optimized for both types of consumers.

desktop/laptop

97%

2010

2012

smartphone/tablet

3%

desktop/laptop

46%

smartphone/tablet

54%

As the soon-to-be dominant medium consumers use to access the web, it’s no

wonder print ads and TV videos are migrating to the new ship of communications

and commerce. In fact, according to a recent Strategy Analytics projection, world-

wide mobile ad spending is expected to jump 85% in 2012, making it a $67 billion

industry. But not only is the physical world joining the digital world, these mobile

messages can also be effective in driving loyal consumers back to brick and

mortar products and promotion. Smartphones are the promise of omnichannel

loyalty coming to life. Think about it this way: Smartphones deliver push and pull

from everywhere and anywhere, anytime day or night - wherever you are.

Thanks to the burgeoning world of apps (more than 500,000 in the iTunes app

store alone) and the mobile web, social media sites like Facebook and Twitter are

constantly within fingertip distance. And if they’re on the tips of users’ hands, you

can be sure they’re on the minds of marketers and loyalty program designers too.

The most recent data suggests that 68% of small businesses use Facebook as a

marketing tool and that 78% planned to spend more in 2012 on their social media

budgets than they did the year before. More importantly, connecting with consum-

ers in the social media space opens up the possibility of one customer’s loyalty to

a particular brand becoming contagious and spreading through their social

networks to other potential consumers—building an army of brand ambassadors.

MOBILE

SOCIAL MEDIA

Omnichannel Loyalty: Designing the Ultimate Customer Experience8

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Since the dawn of the computer video game age with the 1972 release of Atari-

classic Pong, a game with a tennis-like feel, marketers have known that incorporat-

ing elements of game play into product engagement is a great way to sell their

specific products. Today, gamification is evident in loyalty promotions that promote

what’s known as the three Ms—motivation, momentum and meaning—and can

include things like rewards or points, different levels (of increasing difficultly) for

customer engagement, and game world linking to larger real world purposes (e.g.

customer engagement whose accumulated points can go toward helping a non-

profit or other cause). An example of gamification can be seen in the efforts of

LEAP4LIFE, a subsidiary of Sweat Equity Network (SEN), which has perfected

engagement through lifestyle where it offers a range of team and individual fitness

challenges redeemable for rewards and points. In the past six months SEN partici-

pants have logged 271.7 million steps and burned 11,448,663 calories, or about

enough energy to sustain a single person for 12.5 years under a normal diet!

This may be the strongest example yet of how the smartphone is helping mix, blur

and combine physical and real-world marketing aspects and, therefore, is

becoming critical in shaping the new omnichannel loyalty picture. So-called “smart”

digital signs are popping up everywhere and estimates from IMS Research put the

number of units at 11 million worldwide with global revenues reaching $7 billion by

2013. More than just delivering static content or even updating digital content to an

amorphous, disengaged passerby, smart signs via opt-in safeguards can “talk” to

smartphones and send relevant and timely marketing messages that can begin to

drive loyalty long before a consumer has even considered making a purchase.

NFC relies on radio frequency identification similar to Bluetooth® but works at far

shorter ranges, around 4/5 of an inch to 4 inches and is the technological wizardry

behind offerings like Google Wallet. Instead of swiping traditional credit or loyalty

cards, NFC allows for virtual cards on smartphone screens that can be scanned by

point-of-sale readers, much like the common credit card swipe does today. But by

remaining within the mobile medium, marketers can offer a mobile-enabled loyalty

promotion without making customers jump through real-world and virtual hoops to

redeem. Market research firm Frost and Sullivan predicts that by 2015, NFC

transactions will be a $151.7 billion industry.

GAMIFICATION

LOCATION-BASED TECHNOLOGY

NEAR FIELD COMMUNICATIONS

Omnichannel Loyalty: Designing the Ultimate Customer Experience9

In-Stat, A NPD group company

As the number of mobile payment users grows to over 375 million in 2015, we predict the demand for devices with NFC communications technology will push global annual shipments of NFC chips to over 1.2 billion by 2015.

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MOBILE AND THE CONNECTED

CONSUMER

used mobi le

for in-s tore

decis ion-

making

cal led f r iends

for decis ion-

making

advice

read product rev iews

compared pr ices

38%

24%

25%

52%

DIGGING DEEPEROmnichannel loyalty is the wave of the now—poised to have a profound impact on

the way businesses attract, engage and retain customers and how organizations

restructure their loyalty and rewards campaigns. Harnessing the power of

omnichannel means being increasingly everywhere and anywhere for omnichannel

consumers—shoppers who no longer distinguish between online, retail in-store

and mobile purchases. Why? Because in growing numbers transactions are

happening simultaneously as shoppers browse to research products, price

compare and then choose to buy products in-store or seek better deals elsewhere.

Pew Research found that during the 2011 holiday season, 52% of all adults used

their mobile device while in-store specifically related to their prospective purchase;

38% to call a friend to ask questions or get advice; 24% to read product reviews;

and 25% to compare prices. The 18-29 and 30-49 age groups reported the highest

usage in all three subcategories—63% and 59% respectively. Seeking that better

deal elsewhere and, more importantly, being engaged much earlier in the customer

lifecycle is exactly where the notion of omnichannel loyalty comes into play, and

begins to differentiate itself. Just as marketers seek seamless integration between

marketing channels, so too must they place equal value on seamless loyalty.

Consumers want everything now and in all places in real time, including loyalty

benefits. Rather than being seen as siloed marketing channels, each with their

own goals, product expectations and data tracking, omnichannel outreach

integrates all marketing including loyalty and optimizes all channels so that they

can operate as one, engaging ever tech-savvy consumers at the right time using

the most relevant content to provide an uncluttered, efficient experience—the

experience that today’s omnichannel consumer demands, but rarely achieves.

The reality is that the days of multichannel marketing are over. While the “parts”

may all be in place, they’re not communicating as efficiently as possible. Back to

the retail customer example on page 3 who prefers an SMS-level engagement to

start their shopping experience, while the cashier not knowing that tries to pitch a

loyalty program at checkout. That’s where today’s multi-channel loyalty programs

miss the mark. Ideally this hypothetical cashier should have been fully aware of

how the customer preferred their branding interaction. And in these struggling

economic times, every dollar shelled out by consumers factors big time in their

decision-making process. Failing to provide the type of channel integration

consumers now expect could doom your loyalty program before it ever takes root.

Omnichannel Loyalty: Designing the Ultimate Customer Experience10

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OMNICHANNEL LOYALTY IN PRACTICE (ALMOST)

Data increasingly shows that the perceived value of loyalty programs has

dropped—only 22% of respondents in a 2011 Forrester survey said they purchased

more and more times from a brand because of their involvement in a loyalty program,

compared to 31% in 2008. And overall just 35% of loyalty program members make up

a typical company’s total customer base. So the question becomes how in an age of

hyper competition can omnichannel loyalty marketers differentiate and improve their

offerings? The answer is to provide better experiences aligned across all channels so

you can improve loyalty related efforts and grow membership. That’s not to say

implementation is easy. Rather, upgrading from multi-channel to omnichannel requires

top-level buy-in to the omnichannel marketing approach, which can then be leveraged

in the loyalty program. It’s also important to think in stages and phases. Going

omnichannel doesn’t have to happen all at once. Understand the true value of what

omnichannel true value of what omnichannel can do for your company before jumping

in and investing.

Omnichannel Loyalty: Designing the Ultimate Customer Experience11

It’s about alignment of what you already have in place, and aligning the message

and channel strategies. Research the uses, strategies and tactics, and

understand the channels better and use them to their best advantage.

Omnichannel marketing and omnichannel loyalty aren’t just buzzwords, but are

true philosophies decidedly based on hard facts and emerging trends. Think

overhaul, not just simple upgrade.

For all that’s changed in loyalty marketing, what hasn’t changed is equally

important: customers seek a unique experience, with appealing benefits and

experiential rewards that meet their needs and compels them to further action.

Especially in these cash-strapped times, loyalty programs, from card-based to

smartphone-enabled to everything else in between, are the backbone of the

marketing industry because they promise true customer satisfaction. Messaging

and relevant content needs to hit customers where they “live” and transact—on

the go and everywhere. Integrating existing loyalty programs into an omnichannel

approach, while ditching the one-size-fits-all-paradigm, is a must if loyalty

programs wish to evolve with current marketing.

Omnichannel loyalty doesn’t exist only in theory. It’s beginning to exist in practice

too. And even if not fully implemented it’s at least being considered critical to the

shopper mindset of the very near future. To that point, the Harvard Business

Research published an intriguing article related to this matter. Titled, “The Future of

Shopping,” the piece began with an entirely believable, if fictional, scene setter.

Amy, 28, of Chicago, is stuck inside on a snowy Saturday. The dilemma: Amy is

planning a Caribbean getaway and needs some new clothes. In 2012 she likely

would begin her wardrobe search on the web with her smartphone, tablet or laptop.

But in 2016 (when the scenario takes place) she begins her research by

videoconferencing with her personal concierge at a favorite store.

The concierge recommends several selections and Amy’s avatar—a graphical

image that represents a person—tries some on while others are rejected. Amy is

then free to continue price comparing, shop using more traditional web browsing

techniques and discuss her purchases and potential buys with her friends through

social media. Ultimately, she buys the clothes off her smartphone to be picked up

in-store. Upon leaving an interactive digital sign has another customer-specific

offer. That too is ordered via contactless QR code and will be shipped to her home.

While omnichannel loyalty isn’t mentioned, it very well could have. Amy is

incentivized to become a more loyal customer thanks to a combination of digital

and real-world technologies, successfully mixing both the online and offline worlds.

Perhaps, if we were writing the above scenario tailored specifically to omnichannel

loyalty, we would have only changed how Amy’s shopping mission began. Rather

than having Amy reach out to a specific store or search online, an omnichannel

loyalty system may have been aware of her travel plans thanks to its seamless

integration with her Facebook page. In our modified scenario, Amy receives a text

message, Twitter feed or even an email (depending on her preferences) alerting her

to the potential deals, savings and most importantly, her personal style interests.

That’s what it means to extend loyalty scenarios to the very beginning of the

transaction process. But there’s no reason why 2016 can’t be 2012. The technology

needed to launch omnichannel loyalty programs already exists. All that’s required is

the organization, planning and integrated software that monitors and cross

compares an individual’s digital life to turn multi-channel loyalty into an

omnichannel framework.

McKinsey & Company

“It might be a retailer’s worst nightmare: a consumer stands before a wall of flat-screen TVs, contemplates a purchase, and pulls out a smartphone to see if a better deal is available elsewhere. This increasingly common sight may heighten retailers’ fears that they are caught in an inevitable race to the bottom on price. Yet while price competition is tough, our consumer research and client experience show that perceptions of value still matter in the ever-more-complex multichannel-retailing environment.

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LESSONS LEARNED

IMPLEMENTING A LOYALTY APPROACH

Effective omnichannel loyalty programs need to be incorporated throughout all

mediums, each based on financial objectives with key performance indicators and

metrics gathering that can be easily shared between them—and from the marketer,

acted on and adjusted in real time using the right technology platform.

But a word to the wise; there’s growing evidence to suggest that as much as

ineffective loyalty programs risk turning customers away, data overload is

overwhelming marketers too. A recent IBM study found that 90% of real-time data

being collected isn’t being used effectively. Additionally, while 80% of chief marketing

officers (CMOs) continue to collect traditional market data (e.g. customer surveys),

only 26% track blogs and just 40% track “any online conversation.” Many still just

don’t get it.

Before an omnichannel loyalty program can be integrated and implemented,

companies should first take careful stock of their existing multi-channel loyalty efforts

and perform channel by channel evaluations of what they’re doing well and what

could be done better.Collecting customer data is only the first step. Analyzing it is

what’s really important. And because it’s easier to engage existing customers than

attract new ones, understanding and leveraging that mountain of data becomes even

more essential.

Data increasingly shows that the perceived value of loyalty programs has

dropped—only 22% of respondents in a 2011 Forrester survey said they purchased

more and more times from a brand because of their involvement in a loyalty program,

compared to 31% in 2008. And overall just 35% of loyalty program members make up

a typical company’s total customer base. So the question becomes how in an age of

hyper competition can omnichannel loyalty marketers differentiate and improve their

offerings? The answer is to provide better experiences aligned across all channels so

you can improve loyalty related efforts and grow membership. That’s not to say

implementation is easy. Rather, upgrading from multi-channel to omnichannel requires

top-level buy-in to the omnichannel marketing approach, which can then be leveraged

in the loyalty program. It’s also important to think in stages and phases. Going

omnichannel doesn’t have to happen all at once. Understand the true value of what

omnichannel true value of what omnichannel can do for your company before jumping

in and investing.

Omnichannel Loyalty: Designing the Ultimate Customer Experience12

It’s about alignment of what you already have in place, and aligning the message

and channel strategies. Research the uses, strategies and tactics, and

understand the channels better and use them to their best advantage.

Omnichannel marketing and omnichannel loyalty aren’t just buzzwords, but are

true philosophies decidedly based on hard facts and emerging trends. Think

overhaul, not just simple upgrade.

For all that’s changed in loyalty marketing, what hasn’t changed is equally

important: customers seek a unique experience, with appealing benefits and

experiential rewards that meet their needs and compels them to further action.

Especially in these cash-strapped times, loyalty programs, from card-based to

smartphone-enabled to everything else in between, are the backbone of the

marketing industry because they promise true customer satisfaction. Messaging

and relevant content needs to hit customers where they “live” and transact—on

the go and everywhere. Integrating existing loyalty programs into an omnichannel

approach, while ditching the one-size-fits-all-paradigm, is a must if loyalty

programs wish to evolve with current marketing.

2012 Forrester Research

Wave Report

Loyalty and customer intelligence are inextricably joined at the hip. CI systems such as customer relationship management (CRM) and campaign management tools generate customer insights that make programs smarter. In turn, loyalty programs generate valuable customer data that feeds customer intelligence.

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KEY TAKEAWAYS

Similarly, the goal of omnichannel loyalty is to attract and engage customers at the earliest stages of the shopper experience and be able to do that across all platforms.

Omnichannel loyalty is the next evolution—decisive approach to enhancing the overall customer experience by collaborating with teams cross functionally (understanding how they are using these specific channels) to leverage assets to maximize the loyalty and brand experience.

Omnichannel marketing is the outgrowth of multi-channel marketing. Simply put, marketers are (striving toward/desiring to/etc.) reaching out to their customers across all platforms, mediums and channels in a more efficient and aligned manner to track data better than ever and ensure the best fit and most meaningful engagement for a particular customer. One size fits all is over.

Omnichannel loyalty maximizes the overall impact of marketing dollars and strategies because the comprehensive approach is not merely measured by individual campaigns and tactics, but instead is a coordinated strategy to take advantage of the cumulative benefits (from consistent messaging over time, across multiple channels) inherent in an omnichannel strategy.

Omnichannel Loyalty: Designing the Ultimate Customer Experience13

Data increasingly shows that the perceived value of loyalty programs has

dropped—only 22% of respondents in a 2011 Forrester survey said they purchased

more and more times from a brand because of their involvement in a loyalty program,

compared to 31% in 2008. And overall just 35% of loyalty program members make up

a typical company’s total customer base. So the question becomes how in an age of

hyper competition can omnichannel loyalty marketers differentiate and improve their

offerings? The answer is to provide better experiences aligned across all channels so

you can improve loyalty related efforts and grow membership. That’s not to say

implementation is easy. Rather, upgrading from multi-channel to omnichannel requires

top-level buy-in to the omnichannel marketing approach, which can then be leveraged

in the loyalty program. It’s also important to think in stages and phases. Going

omnichannel doesn’t have to happen all at once. Understand the true value of what

omnichannel true value of what omnichannel can do for your company before jumping

in and investing.

It’s about alignment of what you already have in place, and aligning the message

and channel strategies. Research the uses, strategies and tactics, and

understand the channels better and use them to their best advantage.

Omnichannel marketing and omnichannel loyalty aren’t just buzzwords, but are

true philosophies decidedly based on hard facts and emerging trends. Think

overhaul, not just simple upgrade.

For all that’s changed in loyalty marketing, what hasn’t changed is equally

important: customers seek a unique experience, with appealing benefits and

experiential rewards that meet their needs and compels them to further action.

Especially in these cash-strapped times, loyalty programs, from card-based to

smartphone-enabled to everything else in between, are the backbone of the

marketing industry because they promise true customer satisfaction. Messaging

and relevant content needs to hit customers where they “live” and transact—on

the go and everywhere. Integrating existing loyalty programs into an omnichannel

approach, while ditching the one-size-fits-all-paradigm, is a must if loyalty

programs wish to evolve with current marketing.

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ABOUT THE AUTHOR

ABOUT KOBIE MARKETING, INC.

Michael Hemsey is a recognized leader in loyalty marketing and speaks regularly

at industry conferences. As president of Kobie Marketing, he is responsible for

leading all facets of the organization including business development, IT initiatives,

client services, and brand execution. For 15 years, Michael has cultivated a rich

background in client services, product development, marketing, technology and

operations.

Forrester Research recently named Kobie a leading loyalty marketing service

provider, ranking them highest for their technology platform, customer satisfaction

and program management services. Kobie Marketing is a global leader in loyalty

experience and an industry pioneer, delivering end-to-end strategy, technology and

program management solutions. For nearly 25 years, Kobie has provided

innovative loyalty programs to the world's most successful brands, helping clients

receive incremental revenue, product and household penetration, and brand

advocacy. Kobie delivers using Alchemy™, a best-in-class loyalty marketing

technology platform. To learn more about omnichannel loyalty, visit the new

company website Kobie.com. Email [email protected] for full citations.

Omnichannel Loyalty: Designing the Ultimate Customer Experience14